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Charlie Munger

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updated 20 Feb 2023

Charlie Munger is an American businessman and investor who is best known as the vice chairman of Berkshire Hathaway, the conglomerate holding company led by Warren Buffett. Munger has been a close business partner and friend of Buffett for over 60 years and plays a key role in the investment decisions made by Berkshire Hathaway.

Munger is a highly respected figure in the business world, known for his investment acumen, his ability to think critically, and his wisdom in various fields. He is considered a value investor, similar to Warren Buffett, and he applies the same principles of buying undervalued companies with strong fundamentals and holding them for the long-term.

Munger is also known for his wit and wisdom, and often provides unique perspectives on various business and life topics. He is a proponent of the "latticework of mental models", a concept that suggests that by acquiring a diverse set of knowledge and understanding of various disciplines, one can develop a more comprehensive and nuanced understanding of the world.

Despite his age, Munger is still actively involved in the management of Berkshire Hathaway, and in addition to his role as Vice Chairman, he also sits on the board of several other companies, such as Costco and Wells Fargo.

Munger is also a philanthropist, he has donated millions of dollars to various charitable causes, including education and health care. He has also pledged to give away the majority of his wealth to charitable causes, similar to his business partner Warren Buffett.

Best Investments

Charlie Munger, like Warren Buffett, is a value investor who has made a number of successful investments over the years. Some of his best-known investments include:

  1. Wells Fargo: Munger has been a director of Wells Fargo since the early 1990s, and the bank has been a major source of returns for Berkshire Hathaway.

  2. Costco: Munger has been a director of Costco since the company went public in 1985, and the company has grown to become one of the largest retailers in the world.

  3. Blue Chip Stamps: Munger was a director of Blue Chip Stamps, a California-based company that was eventually acquired by Berkshire Hathaway. This investment was considered a major factor in the early success of Berkshire Hathaway.

  4. KFC: Munger was a director of KFC when it was owned by Heublein, and helped to turn the company around and make it profitable.

  5. Wesco Financial: Munger was the chairman of Wesco Financial Corporation, a Berkshire Hathaway subsidiary, from 1984 until 2011. He helped to turn the company around and make it profitable and was later merged into Berkshire Hathaway.

It's worth noting that Charlie Munger, like Warren Buffett, has a long-term investment horizon, and many of his best investments have been held for many years, some of them even decades, this has allowed the investments to compound and generate significant returns.

On China

Charlie has been an advocate of Chinese Stocks and the extreme discount that they trade at and is a major shareholder of Alibaba and BYD, and Chinese electric car company.

On Bitcoin

Charlie has been an active critic of Bitcoin and all other crypto currencies. He believes they are Ponzi Schemes that have no intrinsic value. He believes the people that advocate for them are a-moral and wish financial collapse on the world.

Diversification

Charlie has been quoted as saying "The idea of excessive diversification is madness. Wide diversification, which necessarily includes investment in mediocre businesses, only guarantees ordinary results."

Books

Charlie is a major advocate of reading. "In my whole life, I have known no wise people (over a broad subject matter area) who didn't read all the time—none. Zero. You'd be amazed at how much Warren reads—and how much I read. My children laugh at me. They think I'm a book with a couple of legs sticking out."

  1. Poor Charlies Almanack, while Charlie didn't read this, he did write it, and its a great insight into his thinking and investing style.

  2. Influence: The psychology of Persuasion has had a major influence on his thinking.

  3. Titan: The Life of John D. Rockefeller

  4. Only the Paranoid Survive by Andrew Grove, the former CEO of Intel

  5. Models of My Life by Herbert A. Simon

Other Resources

Charlie Munger: The Man Who Built Berkshire Hathaway